Correlation Between Raiffeisen Bank and GEVORKYAN

Can any of the company-specific risk be diversified away by investing in both Raiffeisen Bank and GEVORKYAN at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Raiffeisen Bank and GEVORKYAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Raiffeisen Bank International and GEVORKYAN as, you can compare the effects of market volatilities on Raiffeisen Bank and GEVORKYAN and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Raiffeisen Bank with a short position of GEVORKYAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raiffeisen Bank and GEVORKYAN.

Diversification Opportunities for Raiffeisen Bank and GEVORKYAN

0.67

Correlation Coefficient

Raiffeisen Bank  GEVORKYAN

Poor diversification

The 3 months correlation between Raiffeisen and GEVORKYAN is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Raiffeisen Bank International and GEVORKYAN as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEVORKYAN as and Raiffeisen Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Raiffeisen Bank International are associated (or correlated) with GEVORKYAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEVORKYAN as has no effect on the direction of Raiffeisen Bank i.e., Raiffeisen Bank and GEVORKYAN go up and down completely randomly.

Pair Corralation between Raiffeisen Bank and GEVORKYAN

Assuming the 90 days trading horizon Raiffeisen Bank International is expected to generate 2.51 times more return on investment than GEVORKYAN. However, Raiffeisen Bank is 2.51 times more volatile than GEVORKYAN as. It trades about 0.17 of its potential returns per unit of risk. GEVORKYAN as is currently generating about 0.16 per unit of risk. If you would invest  45,880  in Raiffeisen Bank International on September 22, 2024 and sell it today you would earn a total of  2,690  from holding Raiffeisen Bank International or generate 5.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Raiffeisen Bank International  vs.  GEVORKYAN as

Raiffeisen Bank Inte

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Raiffeisen Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GEVORKYAN as

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEVORKYAN as are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GEVORKYAN may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Raiffeisen Bank and GEVORKYAN

The main advantage of trading using opposite Raiffeisen Bank and GEVORKYAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raiffeisen Bank position performs unexpectedly, GEVORKYAN can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GEVORKYAN will offset losses from the drop in GEVORKYAN's long position.

The idea behind Raiffeisen Bank International and GEVORKYAN as pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.